April 8, 2008 / 9:42 PM / 11 years ago

Candente CEO sees new resource study ready in May

SANTIAGO, April 8 (Reuters) - Canadian junior miner Candente Resources will publish a new resource study in May that could raise the estimated ore grade and size of its Canariaco deposit in Peru at a time it seeks financing for the mine, Chief Executive Joanne Freeze said on Tuesday.

Freeze said Candente (DNT.TO), whose current resource study puts the deposit in northern Peru at 820 million tonnes, with an ore grade of about 0.45 percent, hopes to complete a feasibility study for the project by early 2009.

Candente already was talking to potential lenders and financiers for the project and has not ruled out selling itself to a larger miner, although it wants to show it can become a producer.

“All options are open in terms of getting a partner or going into production,” Freeze said at the CESCO/CRU copper conference in Chile on Tuesday. “We need to have a viable project to even have a good exit opportunity.

Chinese companies hungry for ore bought mining projects three times in Peru last year, including the Toromocho property of Peru Copper for $790 million. More deals are widely expected.

Candente thinks it has one of the best-looking projects in Peru, which is expected to start pulling in more foreign investment after Fitch Ratings upgraded it to investment grade last week. The last time it updated its resource study, two years ago, the size of the deposit was greatly increased.

Freeze said parts of the deposit have a copper grade of 0.6 percent and that the types of ore would give the company extra flexibility when processing the mineral rich in copper.

Candente says it potentially could start producing in 2011 and that the financing is available for mining projects despite credit troubles in the United States.

Deposits in Peru’s pension fund system are growing quickly and pension fund managers say they are keen to invest in mine projects in the Andean country.

Candente says its project also enjoys good supplies of water, which is hard to find in Peru, along with access to a power grid. It said it can build a road to a highway to transport copper from the future mine.

The company also has started to fund community projects and environmental programs in the community near the drilling area. It is part of an effort to avoid any unexpected delays in a country where poor communities in the mountains have blocked some high-profile projects in recent years.

“It’s probably the hardest part of building a mine these days,” Freeze said.

Additional reporting by Simon Gardner and Pav Jordan; Editing by David Gregorio

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